How to Get Personal Loans, Even For Australians with Bad Credit

May 8, 2023
By Elaine Loja
4 min read

A personal loan is the perfect solution when you’re short on cash.

If you need extra funds between paydays, have surprise bills you need to pay, or simply need to stretch your money right now, a personal loan delivers a convenient – and quick – solution. And they’re even easy to find and fund online.

But getting a personal loan approved ASAP can be a bit more challenging when you’re working with less-than-perfect credit. A low credit score, or a bad credit score, can put you at risk of getting denied for a loan. Fortunately, if you know where to look, you can find a personal loan that suits your specific financial situation.

Here’s how to get a personal loan, even if you have bad credit.

Double-Check Your Credit Score

Even if you’ve been checking your credit score every so often, it’s a good idea to do a deeper dive before you apply for a personal loan. Your credit score is probably accurate – but there could also be errors hiding in your credit history.

Take a close look at all of the key areas of your credit score. Do all of the accounts look familiar (and correct)? Is your payment history on par with how you’ve been paying your bills and credit cards? If you spot any errors, you can contact the related accounts and get them corrected.

And while you’re looking for any potential inaccuracies or mistakes, you should also see if there are any key areas of your credit that you can improve before you apply for a personal loan. On-time payments, for example, can increase your score a little if you’re able to build a few months of a positive trend. Or, if you’re able to pay down a small outstanding balance, you can have a noticeable effect on your overall score.

Shop Around and Compare Lenders

When you’re ready to start looking for the perfect personal loan, it’s critical that you do your research. You don’t want to apply for a loan that doesn’t suit your financial situation – or wind up with a lender with a bad reputation.

That’s why you absolutely need to search for different personal loan lenders and compare them to one another. The easiest way to do this? Get online and look at a wide selection of different personal loan options. You can compare interest rates and fees, repayment plans or schedules, and the application processes. This will help you find a loan that works for you and, hopefully, costs you the least amount of extra cash.

While you’re searching for and comparing lenders, you should also look specifically for lenders who work those who have bad credit. Widely available online, these lenders are easy to find. However, you’ll want to vet them and take a close look at their requirements for getting approved to find the best option for your credit score.

Pre-qualify Before You Apply

Make it easy to actually secure a personal loan with your credit score by jumping ahead in the process with pre-qualification. Just like credit cards, there are plenty of personal loan providers that’ll allow you to see if you pre-qualify for the funds before you go through the work of the actual application.

Why is pre-qualification so beneficial? Every time you apply for a loan, the lender will perform a credit check – and too many credit checks in a short of period of time can actually lower your credit score even more. So, if you already have bad credit, you only want credit checks to happen when you’re sure you can snag the funds.

Search online for personal loans that allow you to pre-qualify, and you can avoid these extra credits and the potential impact on your credit score. Plus, as an added bonus, knowing you pre-qualify for multiple loans may help you negotiate a better deal and interest rate.

Search for Low-Fee Lenders Online

Lastly, don’t forget to turn to the internet when you’re shopping around for a personal loan. You can easily find loans for bad credit scores online, and then you can compare all of your available options effortlessly in one place.

Additionally, as you do your online research, you can also look for personal loans for individuals with bad credit at a variety of places. You can go beyond traditional big-name banks and find credit unions that offer personal loans, which often come with lower interest rates and capped APRs. Or, you can take a look at online lenders who don’t operate out of brick-and-mortar locations. These online lenders often have lower overhead costs, which means they can offer loans for bad credit without sky-high fees.

And, of course, you want to search online for personal loans with the lowest fees and interest rates. Always shop around for a better rate and fee schedule. These can change from day to day, which means searching regularly is the only way to stay on top of your options.

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